Rahul Gandhi's single-slab GST idea flawed: Jaitley
New Delhi, July 1: Union Minister Arun Jaitley on Sunday attacked Congress President Rahul Gandhi's idea of a single slab GST for India, terming it flawed.
He added while there would be scope to merge some of the mid-category tax slabs depending on the collections going up, but a single-slab system will not work for India.
"Rahul Gandhi has been advocating a single slab GST for India. It is a flawed idea. A single slab GST can function only in those countries where the entire population has a similar and a higher level of paying capacity," Jaitley wrote in a Facebook post on completion of one year of the Goods and Services Tax (GST).
"Being fascinated by the Singapore model is understandable but the population profile of a state like Singapore and India is very different," he said adding that while Singapore can charge 7 per cent GST on food and on luxury goods, that model won't work here.
"Since GST is a regressive tax, the poor have to be given a substantial relief. Thus most food items - agricultural products and the aam aadmi (common man) used products have to be tax exempt. Some others have to be taxed at a nominal rate. The others could be taxed higher.
"Eventually, as the collections improve, many more items from the 28 per cent category can possibly come down. Only sin products and luxury goods can remain there," he said.
Jaitley also slammed Gandhi and former Finance Minister P. Chidambaram on their demand to bring petroleum products under GST, saying the Congress Finance Ministers in the states were not ready for it.
He said it was the current government which worked out a formula to ensure that "petroleum products would be included in the Constitution amendment providing for the GST but the council can decide the date from which to bring them into GST".
"The UPA kept petroleum products permanently outside GST. On the contrary, we brought them back into the Constitution as levyable to GST and can gradually impose the GST when the GST Council so decides.
"For this I would continue to make my earnest efforts and hopefully when the states are more comfortable with the revenue position, it would be an ideal time to strike for a consensus between them," he said.
Jaitley, who is listed as a minister without portfolio in the Prime Minister's website, also attacked the Congress-led UPA Government for "losing the confidence of the states" when the previous government tried to implement GST.
"In a move towards the single tax system, the UPA asked the states to abolish the Central Sales Tax (CST). It promised the states that it would give them a compensation in lieu of the CST for a certain number of years.
"The states acted accordingly, abolished the CST and the Central government owed the states several thousand crores as CST compensation. When the states demanded CST compensation, the Centre would look the other way," he said.
Jaitley added that when he took over as the Finance Minister, he cleared all the arrears of CST in order to bridge the trust as the states had declared that they would discuss GST only if past CST compensation is paid.
"The CST compensation was paid. The states were then willing to come to the table and move further on the GST," he said.
Jaitley also said after he took over, he agreed to pay to the states, after discussing in the GST Council, a 14 per cent increase of revenue for the first five years for any loss of revenue and the states jumped for this proposal.
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Unruly scenes witnessed in Punjab Assembly
Chandigarh (PTI): The Punjab Assembly on Friday witnessed high drama on Friday after Congress MLA Sukhpal Singh Khaira made an allegedly objectionable remark against Chief Minister Bhagwant Mann during an intense argument over the alleged use of mobile phone in the house by the legislator.
During the one-day special session of the Punjab Vidhan Sabha here, Mann accused Khaira of using a mobile phone when Speaker Kultar Singh Sandhwan was reading out an official resolution on the revision of wages.
After rising from his seat, the chief minister pointed to the speaker, claiming that Khaira is busy on his mobile phone and urged him to ask the Congress MLA what Sandhwan had said about the resolution.
The speaker then asked Khaira to maintain order in the house and listen to the resolution carefully.
Mann then asked Khaira, "Why don't you go out and then use it (mobile phone)," which led to a strong verbal altercation during which the opposition MLA hurled an accusation against the chief minister. Meanwhile, the speaker appealed for order and insisted that the chair be addressed.
However, both Mann and Khaira continued arguing and could be seen pointing fingers at each other as the proceedings of the house were disrupted.
The AAP MLAs also rose from their seats with Finance Minister Harpal Singh Cheema condemning Khaira for his conduct and demanded action against him.
Cheema further alleged that Khaira "always tries to disturb the house" as he spoke about his conduct in the assembly.
The incident occurred as an official resolution on the revision of wages was presented at the special session by Labour Minister Tarunpreet Singh Sond who said it paid homage to labourers on the International Workers' Day.
"Workers are the axis of construction of the nation, the community, the state and society. Every construction project succeeds only through their blood and sweat," the resolution read.
As per the resolution, "The base rate of minimum wages for the working class in Punjab was last revised in the year 2012. Although the dearness allowance has continued to increase since 2012, there has been no increase in the base rate of minimum wages.
On this sacred occasion of May Day, in this special session of the legislative assembly, this house proposes to revise and increase the minimum wages of labourers and strongly recommends to the government to take a decision regarding the increase of minimum wages for workers, so that the contributions of the workers can be acknowledged." PRK
